Berkshire Hathaway Sits on $137B, Warren Buffett Says Market Has Nothing Attractive to Buy

UTC by Bhushan Akolkar · 3 min read
Berkshire Hathaway Sits on $137B, Warren Buffett Says Market Has Nothing Attractive to Buy
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Warren Buffett’s Berkshire Hathaway refrains from any fresh buys during this market correction saying that the market is just not attractive enough to make new investments.

After the Dow Jones Industrial Average (DJIA) hit its multi-year low of $18,500, investors have been chipping in to find new opportunities in the market. Investors are hunting down stocks that are relatively available at cheap valuations. While Dow Jones has jumped over 20% from its bottom, the dust isn’t completely settled as per Berkshire Hathaway Inc (NYSE: BRK.A) (NYSE: BRK.B). Last Saturday, May 2, the Oracle of Omaha addressed the company’s annual shareholders’ meeting. During the meeting, Berkshire Hathaway CEO and Chairman Warren Buffett stated that his company continues to sit on a massive cash hoarding of $137 billion.

According to Buffett, this is not the right time to park his company’s money in the market. He also added that Berkshire Hathaway hasn’t found any public traded company at attractive valuations to buy. He explained:

“We have not done anything, because we don’t see anything that attractive to do. Now that could change very quickly or it may not change.”

With the COVID-19 market crash, Berkshire Hathaway investors are eagerly waiting for Buffett to deploy cash in the market. The Oracle of Omaha is known for cherry-picking companies at a discount and take its partial ownership. During the 2008 financial crisis, Buffett has made special investments in Goldman Sachs Group Inc (NYSE: GS) and Bank of America Corporation (NYSE: BAC).

Buffett admitted that they are willing to make some bold mover. However, this is just not the right time. He said:

“We are willing to do something very big. I mean you could come to me on Monday morning with something that involved $30, or $40 billion or $50 billion. And if we really like what we are seeing, we would do it. We haven’t seen anything that attractive.”

Berkshire Hathaway CEO Buffett Liquidates Airline Stocks in Coronavirus Market Crash

The COVID-19 pandemic has put several businesses under severe stress. The airline industry is one of the worst impacted since global travel has come to an absolute halt amid the imposition of lockdown all across the globe.

As Coinspeaker has already reported, Berkshire Hathaway chairman Warren Buffett said that his company has completely liquidated its $4 billion investments in the airline sector. This included investments in giants like American Airlines (NASDAQ: AAL), United Airlines (NASDAQ: UAL), Delta Air Lines (NYSE: DAL), and Southwest Airlines (NYSE: LUV). Buffett said:

“The world has changed for the airlines. And I don’t know how it’s changed and I hope it corrects itself in a reasonably prompt way. I don’t know if Americans have now changed their habits or will change their habits because of the extended period.”

“I think there are certain industries, and unfortunately, I think that the airline industry, among others, that are really hurt by a forced shutdown by events that are far beyond our control,” he added.

Clarifying whether Berkshire has sold all of its shares, Buffett said “yes”.

“When we sell something, very often it’s going to be our entire stake: We don’t trim positions. That’s just not the way we approach it any more than if we buy 100% of a business. We’re going to sell it down to 90% or 80%. If we like a business, we’re going to buy as much of it as we can and keep it as long as we can,” he added. “And when we change our mind we don’t take half measures,” explained he.

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